South Korea chucks antitrust charges at Intel

South Korean officials have issued antitrust charges against Intel, in a move that caps a two-year investigation and creates one more headache for lawyers at the world's biggest chip maker.

The Korean Federal Trade Commission (KFTC) issued a so-called statement of objection against Intel, company spokesman Chuck Mulloy said. He declined to specify the allegations contained in the document, but South Korean news reports have said the inquiry has focused on allegations Intel ran roughshod over antitrust laws by pressuring computer makers to avoid using chips made by Advanced Micro Devices.

"We're confident that the microprocessor market segment is functioning normally and that Intel's conduct has been lawful, pro-competitive and beneficial to consumers," Mulloy told us. "We will now have the opportunity to respond to the commission's objections. We hopefully will be able to show the commission that the market functions properly."

Intel was already facing charges of anticompetitive behavior filed in July by the European Commission. The Santa Clara-based company is also defending itself against a private antitrust lawsuit brought in June 2005 in US district court by AMD, as well as about 80 consumer-related class actions. There is also a separate complaint filed by AMD in Japan that largely echoes the charges it made in its US-based lawsuit.

Intel has denied acting anti-competitively and has said its actions benefit computer buyers.

Under the procedure established by the KFTC, Intel will undergo an administrative process in which it will be able to defend itself against the charges. Commission officials will then make a determination. If Intel objects to that determination, it has the right to appeal it to South Korea's judicial system. South Korean media cited unnamed sources who said the commission would likely reach a decision on a penalty by October.

Like many of the prior antitrust complaints against Intel, the KFTC is zeroing in on discounts Intel offered computer makers in exchange for making exclusive deals and coercion it is said to have applied to prevent them from doing business with AMD, the Korea Timesreported.

Lest readers think the KFTC has no teeth, it's worth noting that the commission in late 2005 fined Microsoft $34m and ordered it to produce a version of Windows without bundling a media player and instant messaging software. ®